Tài liệu quản lý dự án - Project management chapter 2

Tài liệu quản lý dự án - Project management chapter 2

The Organizational Context

Strategy, Structure, and Culture

Moving to Heavyweight Project Organizations

PROJECT MANAGEMENT RESEARCH IN BRIEF

The Impact of Organizational Structure on Project Performance

2.5 PROJECT MANAGEMENT OFFICES

2.6 ORGANIZATIONAL CULTURE

How Do Cultures Form?

Organizational Culture and Project Management

Case Study 2.1 Rolls-Royce Corporation

Case Study 2.2 Paradise Lost: The Xerox Alto

Case Study 2.3 Project Task Estimation and the Culture of "Gotcha!"

Case Study 2.4 Widgets 'R Us

51

Internet Exercises PMP Certification Sample Questions Integrated Project—Building Your Project Plan Notes

Chapter Objectives

After completing this chapter, you should be able to:

1 Understand how effective project management contributes to achieving strategic objectives

2 Recognize three components of the corporate strategy model: formulation, implementation, and evaluation

3 See the importance of identifying critical project stakeholders and managing them within the context

6 Identify the characteristics of three forms of project management office (PMO)

7 Understand key concepts of corporate culture and how cultures are formed

8 Recognize the positive effects of a supportive organizational culture on project management practices versus those of a culture that works against project management

PROJECT MANAGEMENT BODY OF KNOWLEDGE CORE CONCEPTS COVERED

IN THIS CHAPTER

1 Project Scope Management Initiation (PMBoK sec 5.1)

2 Procurement Planning (PMBoK sec 12.1)

3 Project Stakeholders (PMBoK sec 2.2)

4 Organizational Influences (PMBoK sec 2.3)

5 Organizational Structure (PMBoK sec 2.3.3)

6 Organizational Cultures and Styles (PMBoK sec 2.3.2)

7 Socio-Economic-Environmental Influences (PMBoK sec 2.5)

PROJECT PROFILE

Project Management Improves Lenovo's Bottom Line

The demand for and sales of personal computers seems to reach greater and greater heights With global sales of PCs approaching 300 million units for 2008, the industry remains highly profitable but also highly competitive Lenovo, owned by a Chinese corporation but headquartered in Raleigh, North Carolina, is one of the best known and most profitable PC manufacturers Although its main revenues come from its PC line, Lenovo produces every- thing from storage devices and servers to printers, projectors, digital products, computing services, and mobile handsets Lenovo acquired IBM's Personal Computing Division in May 2005 and has used this base as a springboard for rapid overseas expansion In fact, the company has branch offices in 66 countries around the globe and conducts business in 166 countries, while employing more than 25,000 people worldwide Sales outside of China account for approximately 60% of revenue

Before 2004, competitors like Dell and Hewlett-Packard were having a difficult time making serious inroads into the Chinese market for PCs, ensuring that Lenovo could maintain a secure operating base within its own country

In the past five years, however, these rival PC makers have begun aggressive expansion into the Chinese market, resulting in direct threats to Lenovo's key business areas and leading the company to begin a series of steps in order

to increase market share and improve business performance

Introduction 53

Since 2004, Lenovo has adopted the techniques of project management as a critical tool in maintaining competitiveness and to improve their strategic focus and decision making In fact, it treated project management

as the primary means for achieving their strategic goals, using the following steps:

First, after confirming the company's overall strategy, Lenovo set about organizing priority tasks that required multidepartment cooperation into projects, which it referred to as "strategic projects." These strategic projects were about expanding into new markets, solving underlying technical or administrative problems, improving efficiency, integrating resources and improving employee satisfaction Second, Lenovo developed a Project Management Office (PMO), which was specifically designed to coordinate all its strategic projects In this way, it created an institutional support service staffed with professional project managers for all the project groups within the company Third, Lenovo set aside money specifically for implementing strategic plans In the past, strate- gies were not financially supported; now, top management deliberately set aside money for this purpose

Lenovo executives took another critical step in cementing the importance of project management by formally developing career paths within the company for project management Currently, there are more than

100 full-time project managers in Lenovo, but nearly all staff have participated in some projects Top talent was required to take the Project Management Institute's Project Management Professional (PMP) exam to demon- strate their mastery of the discipline The PMP certification is a globally recognized standard for project manage- ment excellence After Lenovo's acquisition of IBM's PC business, the company faced the challenge of blending the cultures and practices of two very different organizations The managers found that using a common knowl- edge base, derived from the PMP certification, helped them create a shared vision and operating process for managing projects globally

Lenovo's commitment to a project management philosophy has allowed it to dramatically influence and alter the company's strategic vision and operating culture Its emphasis on project management has affected hiring decisions, team-based performance measures, speed to market, and global competitiveness For 2007, Lenovo PC sales showed a significant jump past 20 million units sold, establishing the company as one of the top four manu- facturers of personal computers worldwide)

INTRODUCTION

Within any organization, successful project management is contextual What that means is that the

organization itself matters — its culture, its structure, and its strategy each play an integral part and together they create the environment in which a project will flourish or founder Issues that affect a project can vary widely from company to company A project's connection to your organization's overall strategy, for example, the care with which you staff the team, and the goals you set for the project can be critical Similarly, your organization's policies, structure, culture, and operating systems can work to support and promote project management or work against the ability to effectively run projects Contextual issues provide the backdrop around which project activities must operate, so understanding what is beneath these issues truly contributes

to understanding how to manage projects

Before beginning a project, the project manager and team must be certain about the structure of the organization as it pertains to their project and the tasks they seek to accomplish As clearly as possible, all reporting relationships must be specified, the rules and procedures that will govern the project must be estab-lished, and any issues of staffing the project team must be identified Prior to the start of Operation Desert Storm in 1991, the U.S and allied countries devoted an enormous amount of time and effort to develop a working relationship among all coalition members, ensuring that each group was given its assignments, understood its job, and recognized how the overall structure and management of the coalition was expected

to proceed Desert Storm illustrated the importance of clearly establishing an organizational structure before the start of integrated operations

For many organizations, projects and project management practices are not the operating norm In fact, as Chapter 1 discussed, projects typically exist outside of the formal, process-oriented activities associated with many organizations As a result, many companies are simply not structured to allow for the successful completion

of projects in conjunction with other ongoing corporate activities The key challenge is discovering how project management may best be employed, regardless of the structure the company has adopted What are the strengths and weaknesses of various structural forms and what are their implications for our ability to manage projects? This chapter will examine three of the most important contextual issues for project management: strategy, orga-nizational structure, and culture You will see how the variety of structural options can affect, either positively or negatively, the firm's ability to manage projects The chapter will examine the concept of organizational culture and its roots and implications for effective project management

2.1 PROJECTS AND ORGANIZATIONAL STRATEGY Strategic management is the science of formulating, implementing, and evaluating cross-functional

decisions that enable an organization to achieve its objectives.2 In this section we will consider the

rele-vant components of this definition as they apply to project management Strategic management consists

of the following elements:

1 Developing vision statements and mission statements Vision and mission statements establish a sense of what the organization hopes to accomplish or what top managers hope it will become at some point in the future A corporate vision serves as a focal point for members of the organization who may find themselves pulled in multiple directions by competing demands In the face of multiple expecta-tions and even contradictory efforts, an ultimate vision can serve as a "tie breaker," which is highly bene-ficial in establishing priorities A sense of vision is also an extremely important source of motivation and purpose As the Book of Proverbs points out: "Where there is no vision, the people perish" (Prov 29:18) Many firms apply their vision or mission statement to evaluating new project opportunities as a first screening device For example, Fluor-Daniel Corporation, a large construction organization, employs as its vision the goal of being "the preeminent leader in the global building and services marketplace by delivering world-class solutions." Projects that do not support this vision are not undertaken

2 Formulating, implementing, and evaluating Projects, as the key ingredients in strategy tation, play a crucial role in the basic process model of strategic management A firm devotes significant time and resources to evaluating its business opportunities through developing a corporate vision or mission, assessing internal strengths and weaknesses as well as external opportunities and threats, establishing long-range objectives, and generating and selecting among various strategic alternatives

implemen-All these components relate to the formulation stage of strategy Within this context, projects serve as

the vehicles that enable companies to seize opportunities, capitalize on their strengths, and implement overall corporate objectives New product development, for example, fits neatly into this framework New products are developed and commercially introduced as a company's response to business opportunities Effective project management enables firms to efficiently and rapidly respond

3 Making cross-functional decisions Business strategy is a corporate-wide venture, requiring the commitment and shared resources of all functional areas to meet overall objectives Cross-functional decision making is a critical feature of project management, as experts from various functional groups come together into a team of diverse personalities and backgrounds Project management work is a natural environment in which to operationalize strategic plans

4 Achieving objectives Whether the organization is seeking market leadership through low-cost, innovative products, superior quality, or other means, projects are the most effective tools to allow objectives to be met A key feature of project management is that it can potentially allow firms to be effective in the external market as well as internally efficient in operations; that is, it is a great vehicle for optimizing organizational objectives, whether they incline toward efficiency of production or product or process effectiveness

Projects have been called the "stepping-stones" of corporate strategy 3 This idea implies that an zation's overall strategic vision is the driving force behind its project development For example, 3M's desire

organi-to be a leading innovaorgani-tor in business gives rise organi-to the creation and management of literally hundreds of new product development projects within the multinational organization every year Likewise, Rubbermaid Corporation is noted for its consistent pursuit of new product development and market introduction The manner in which organization strategies affect new project introductions will be addressed in greater detail

in our chapter on project selection (Chapter 3) Projects are the building blocks of strategies; they put an action-oriented face on the strategic edifice Some examples of how projects operate as strategic building blocks are shown in Table 2.1 Each of the examples illustrates the underlying theme that projects are the

"operational reality" behind strategic vision In other words, they serve as the building blocks to create the reality a strategy can only articulate

Another way to visualize how projects connect to organizational strategy is shown in Figure 2.1 4 This model envisions a hierarchy where the mission is paramount, objectives more formally define the mission, and strategy, goals, and programs underlie the objectives The figure importantly suggests that the various strategic elements must exist in harmony with each other; that is, the mission, objectives, strategies, goals, and programs must remain in alignment 5 It would make little sense, for example, to create a vision of "an environ-mentally aware organization" if subsequent objectives and strategies aim at ecologically unfriendly policies

2.1 Projects and Organizational Strategy 55

TABLE 2.1 Projects Reflect Strategy

Technical or operating initiatives (such as new distribution

strategies or decentralized plant operations)

Redevelopment of products for greater market acceptance

New business processes for greater streamlining

and efficiency

Changes in strategic direction or product portfolio

reconfiguration

Creation of new strategic alliances

Matching or improving on competitors' products and services

Improvement of cross-organizational communication

and efficiency in supply chain relationships

Promotion of cross-functional interaction, streamlining of

new product or service introduction, and improvement

of departmental coordination

Construction of new plants or modernization of facilities Reengineering projects Reengineering projects New product lines Negotiation with supply chain members (including suppliers and distributors) Reverse engineering projects

Enterprise IT efforts Concurrent engineering projects

Figure 2.2 illustrates the strategic alignment between a firm's projects and its basic vision, objectives, strategies, and goals with concrete examples 6 If, for example, a manufacturer of refrigeration equipment creates

a vision statement that says, in part, that the company is in "the business of supplying system components to a worldwide nonresidential air conditioning market," this vision is clarified by specific strategic objectives: return

on investment (ROI) expectation, dividend maintenance, and social responsibility Supporting the base of the pyramid are strategies, goals, and programs Here the firm's strategies are stated in terms of a three-phase approach: (1) concentrate on achieving objectives through existing markets and product lines, (2) focus on new market opportunities in foreign or restricted markets, and (3) pursue new products in existing markets The organization clearly is intent on first maintaining existing product lines and markets before pursuing new product development and innovation

The goals, shown in the middle of the pyramid base, reflect a four-year plan based on the aforementioned strategies Suppose that a firm's year one goals aim for an 8% return on investment, steady dividends, decreasing unit costs of production, and solid image maintenance Goals for years two through four are progressively more ambitious, all based on supporting the three-phase strategy Finally, the programs indicated at the right side of the pyramid in Figure 2.2 are the sources of the company's projects Each program is typically a collection of supporting projects; hence, even the most basic activities of the company are conducted in support of the firm's strategic elements To break this down, the Image Assessment Program (IAP) is made up of several supporting projects, including:

1 Customer Survey Project

2 Corporate Philanthropy Project

FIGURE 2.1 Relationship of

Strategic Elements

Source: W R King 1998 "The Role

of Projects in the Implementation of

Business Strategy," in D I Cleland and

W R King (Eds.), Project Management

Handbook New York: Van Nostrand

Reinhold, pp 129-139 Reprinted with

permission of John Wiley & Sons, Inc

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FIGURE 2.2 Illustrating Alignment Between Strategic Elements and Projects

Source: W R King 1998 "The Role of Projects in the Implementation of Business Strategy," in

D I Cleland and W R King (Eds.), Project Management Handbook New York: Van Nostrand

Reinhold, pp 129-139 Reprinted with permission of John Wiley & Sons, Inc

3 Quality Assessment Project

4 Employee Relations Project All these projects promote the Image Assessment Program, which in turn is just one supporting program in a series designed to achieve strategic goals In this model, it is likely that several projects actually support multiple programs For example, the Customer Survey Project can provide valuable information to the Product Redesign Program, as customer satisfaction data is fed back to the design department Projects, as the building blocks of strategy, are typically initiated through the corporation's strategic purposes, deriving from a clear and logical sequencing of vision, objectives, strategies, and goals

THAT'S WHY I NEVER SAY "HOW ARE YOU? "

Source: DILBERT: © Scott Adams/Dist by United Features Syndicate, Inc

2.2 STAKEHOLDER MANAGEMENT

Organizational research and direct experience tell us that organizations and project teams cannot operate in ways that ignore the external effects of their decisions One way to understand the relationship of project managers and their projects to the rest of the organization is through employing stakeholder analysis Stakeholder analysis is a useful tool for demonstrating some of the seemingly irresolvable conflicts that occur through the planned creation and introduction of any new project Project stakeholders are defined as all individuals or groups who have an active stake in the project and can potentially impact, either positively or negatively, its development 7 Project stakeholder analysis, then, consists of formulating strategies to identify and, if necessary, manage for positive results the impact of stakeholders on the project Stakeholders can affect and are affected by organizational actions to varying degrees 8 In some cases, a corporation must take serious heed of the potential influence some stakeholder groups are capable of wielding In other situations, a stakeholder group may have relatively little power to influence a company's activities but its presence may still require attention Contrast, for example, the impact that the government has on regulating the tobacco industry's activities with the relative weakness of a small subcontractor working for Oracle on new software development In the first case, the federal government has, in recent years, strongly limited the activities and sales strategies of the tobacco companies through the threat of regulation and litigation On the other hand, Oracle, a large organization, can easily replace one small subcontractor with another

Stakeholder analysis is helpful to the degree that it compels firms to acknowledge the potentially wide- ranging effect that their actions can have, both intended and unintended, on various stakeholder groups 9 For example, the strategic decision to close an unproductive manufacturing facility may make good business sense in terms of costs versus benefits that the company derives from the manufacturing site However, the decision to close the plant has the potential to unleash a torrent of stakeholder complaints in the form of protests from local unions, workers, community leaders in the town affected by the closing, political and legal challenges, environmental concerns, and so forth Sharp managers will consider the impact of stakeholder reaction as they weigh the possible effects of their strategic decisions

Just as stakeholder analysis is instructive for understanding the impact of major strategic decisions, project stakeholder analysis is extremely important when it comes to managing projects The project development process itself can be directly affected by stakeholders This relationship is essentially reciprocal in that the project team's activities can also affect external stakeholder groups 1° Some common ways the client stakeholder group has an impact upon project team operations include agitating for faster development, working closely with the team to ease project transfer problems, and influencing top management in the parent organization to continue supporting the project The project team can reciprocate this support through actions that show willing-ness to closely cooperate with the client in development and transition to user groups

The nature of these various demands can place them seemingly in direct conflict That is, in responding to the concerns of one stakeholder, project managers often unwittingly find themselves having offended or angered another stakeholder who has an entirely different agenda and set of expectations For example, a project team working to install a new software application across the organization may go to such levels to ensure customer satisfaction that they engage in countless revisions of the package until they have, seemingly, made their customers happy However, in doing so, the overall project schedule may now have slipped to the point where top management is upset by the cost and schedule overruns In managing projects, we are challenged to find ways to balance a host of demands and still maintain supportive and constructive relationships with each important stakeholder group

Identifying Project Stakeholders

Internal stakeholders are a vital component in any stakeholder analysis, and their impact is usually felt in relatively positive ways; that is, while serving as limiting and controlling influences (in the case of the company accountant), for example, most internal stakeholders want to see the project developed successfully On the other hand, some external stakeholder groups operate in manners that are quite challenging or even hostile to

project development Consider the case of the recent series of spikes in the price of oil With oil prices whipsawing in a range from $50 to over $140 per barrel during 2008, the impact on the global economy was severe Many groups in the United States have advocated taking steps to lessen its dependence on foreign oil, including offshore exploration and the development of a new generation of nuclear power plants Environmental groups, however, continue to oppose these steps, vowing to use litigation, political lobbying, and other measures to resist the development of these alternative energy sources Cleland refers to these types

of external stakeholders as intervenor groups, defined as groups external to the project but possessing the

power to effectively intervene and disrupt the project's development

Among the set of project stakeholders that project managers must consider are:

Internal

• Top management

• Accountant

• Other functional managers

• Project team members

External

• Clients

• Competitors

• Suppliers

• Environmental, political, consumer, and other intervenor groups

CLIENTS Our focus throughout this entire book will be on maintaining and enhancing client relationships

In most cases, for both external and internal clients, the project deals with an investment Clients are concerned with receiving the project as quickly as they can possibly get it from the team, because the longer the project implementation, the longer the money invested sits without generating any returns As long as costs are not passed on to them, clients seldom are overly interested in how much expense is involved in a project's development The opposite is usually the case, however Costs typically must be passed on, and customers are avidly interested in getting what they pay for Also, many projects start before client needs are fully defined Product concept screening and clarification are often made part of the project scope of work (see Chapter 5) These are two strong reasons why many customers seek the right to make suggestions and request alterations in the project's features and operating characteristics well into the schedule The customer feels with justification that a project is only as good as it is acceptable and useful This sets a certain flexibility requirement and requires willingness from the project team to be amenable to specification changes

Another important fact to remember about dealing with client groups is that the term client does not in every case refer to the entire customer organization The reality is often far more complex A client firm consists

of a number of internal interest groups, and in many cases they have different agendas For example, a company can probably readily identify a number of distinct clients within the customer organization, including the top management team, engineering groups, sales teams, on-site teams, manufacturing or assembly groups, and so

on Under these normal circumstances it becomes clear that the process of formulating a stakeholder analysis of

a customer organization can be a complex undertaking

The challenge is further complicated by the need to communicate, perhaps using different business language, with the various customer stakeholder groups (see Figure 2.3.) Preparing a presentation to deal with the customer's engineering staff requires mastery of technical information and solid specification details On the other hand, the finance and contractual people are looking for tightly presented numbers Formulating stakeholder strategies requires you first to acknowledge the existence of these various client stakeholders, and then to formulate a coordinated plan for uncovering and addressing each group's specific concerns and learning how to reach them

COMPETITORS Competitors can be an important stakeholder element because they are affected by the successful implementation of a project Likewise, should a rival company bring a new product to market, the project team's parent organization could be forced to alter, delay, or even abandon its project In assessing competitors as a project stakeholder group, project managers should try to uncover any information available about the status of a competitor's projects Further, where possible, any apparent lessons a competitor may have learned can be a source of useful information for a project manager who is initiating a similar project If

Clients •

External Environment

2.2 Stakeholder Management 59

Parent Organization

INTERVENOR GROUPS Any environmental, political, social, community-activist, or consumer groups that can have a positive or negative effect on the project's development and successful launch are referred to as inter-venor groups 12 That is, they have the capacity to intervene in the project development and force their concerns

to be included in the equation for project implementation There are some classic examples of intervenor groups curtailing major construction projects, particularly in the nuclear power plant construction industry As federal, state, and even local regulators decide to involve themselves in these construction projects, intervenors have at their disposal the legal system as a method for tying up or even curtailing projects Prudent project managers need to make a realistic assessment of the nature of their projects and the likelihood that one intervenor group

or another may make an effort to impose its will on the development process

TOP MANAGEMENT In most organizations, top management holds a great deal of control over project managers and is in the position to regulate their freedom of action Top management is, after all, the body that authorizes the development of the project through giving the initial "go" decision, sanctions additional resource transfers as they are needed by the project team, and supports and protects project managers and their teams from other organizational pressures Top management requires that the project be timely (they want it out the door quickly), cost efficient (they do not want to pay more for it than they have to), and minimally disruptive to the rest of the functional organization

ACCOUNTING The accountant's raison d'etre in the functional organization is maintaining cost efficiency of the project teams Accountants support and actively monitor project budgets and, as such, are sometimes perceived as the enemy by project managers This perception is wrong minded To be able to manage the project,

to make the necessary decisions, and to communicate with the customer, the project manager has to stay on top

of the cost of the project at all times An efficient cost control and reporting mechanism is vital Accountants perform an important administrative service for the project manager

FUNCTIONAL MANAGERS Functional managers who occupy line positions within the traditional chain of command are an important stakeholder group to acknowledge Most projects are staffed by individuals who are essentially on loan from their functional departments In fact, in many cases, project team members may only have part-time appointments to the team; their functional managers may still expect a significant amount

of work out of them per week in performing their functional responsibilities This situation can create a good deal of confusion, conflict, and the need for negotiation between project managers and functional supervisors and lead to seriously divided loyalties among team members, particularly when performance evaluations are conducted by functional managers rather than the project manager In terms of simple self-survival, team members often maintain closer allegiance to their functional group than to the project team

Project managers need to appreciate the power of the organization's functional managers as a holder group Functional managers are not usually out to discourage project development Rather, they have loyalty to their functional roles, and they act and use their resources accordingly, within the limits of the com-pany's structure Nevertheless, as a formidable stakeholder group, functional managers need to be treated with due consideration by project managers

stake-PROJECT TEAM MEMBERS The project team obviously has a tremendous stake in the project's outcome Although some may have a divided sense of loyalty between the project and their functional group, in many companies the team members volunteered to serve on the project and are, hopefully, receiving the kind of challenging work assignments and opportunities for growth that motivate them to perform effectively Project managers must understand that their projects' success depends upon the commitment and productivity of each member of the project team Thus, their impact on the project is, in many ways, more profound than any other stakeholder group

Managing Stakeholders

Project managers and their companies need to recognize the importance of stakeholder groups and proactively manage with their concerns in mind Block offers a useful framework of the political process that has fine appli-cation to stakeholder management 13 In his framework, Block suggests six steps:

1 Assess the environment

2 Identify the goals of the principal actors

3 Assess your own capabilities

4 Define the problem

5 Develop solutions

6 Test and refine the solutions

ASSESS THE ENVIRONMENT Is the project relatively low-key or is it potentially so significant that it will likely excite a great deal of attention? For example, when EMC Corporation, a large computer manufacturer, began development of a new line of minicomputers and storage units with the potential for either great profits or serious losses, it took great care to first determine the need for such a product Going directly to the consumer population with market research was the key to assessing the external environment Likewise, one of the reasons Ford's Escape Hybrid is so popular was Ford's willingness to create project teams that included consumers in order to more accurately assess their needs prior to project development Recognizing environmentally conscious consumers and their needs caused Ford to create an option of the SUV with a gasoline/electric hybrid engine

IDENTIFY THE GOALS OF THE PRINCIPAL ACTORS As a first step in fashioning a strategy to defuse negative reaction, a project manager should attempt to paint an accurate portrait of stakeholder concerns Fisher and Ury I4 have noted that the positions various parties adopt are almost invariably based on need What, then, are the needs of each significant stakeholder group regarding the project? A recent example will illustrate this point

A small IT firm specializing in network solutions and software development recently contracted with a larger publishing house to develop a simulation for college classroom use The software firm was willing to negotiate a lower-than-normal price for the job because the publisher suggested that excellent performance on this project would lead to future business The software organization, interested in follow-up business, accepted the lower fee because its more immediate needs were to gain entry into publishing and develop long-term customer contacts The publisher needed a low price; the software developer needed new market opportunities

Project teams must look for hidden agendas in goal assessment It is common for departments and stakeholder groups to exert a set of overt goals that are relevant, but often illusionary I 5 In haste to satisfy these overt or espoused goals, a common mistake is to accept these goals on face value, without looking into the needs that may drive them or create more compelling goals Consider, for example, a project in a large,

2.2 Stakeholder Management 61

project-based manufacturing company to develop a comprehensive project management scheduling system The project manager in charge of the installation approached each department head and believed that he had secured their willingness to participate in creating a scheduling system centrally located within the project management division Problems developed quickly, however, because IT department members, despite their public professions of support, began using every means possible to covertly sabotage the imple-mentation of the system, delaying completion of assignments and refusing to respond to user requests What was their concern? They believed that placing a computer-generated source of information anywhere but in the IT department threatened their position as the sole disseminator of information In addition to probing the overt goals and concerns of various stakeholders, project managers must look for hidden agendas and other sources of constraint on implementation success

ASSESS YOUR OWN CAPABILITIES As Robert Burns said, "Oh wad some Power the giftie gie us/To see oursels as ithers see us!" Organizations must consider what they do well Likewise, what are their weaknesses?

Do the project manager and her team have the political savvy and a sufficiently strong bargaining position to gain support from each of the stakeholder groups? If not, do they have connections to someone who can? Each of these questions is an example of the importance of the project team understanding its own capacities and capabilities For example, not everyone has the contacts to upper management that may be necessary for ensuring a steady flow of support and resources If you realistically determine that political acumen is not your strong suit, then the solution may be to find someone who has these skills to help you

DEFINE THE PROBLEM We must seek to define problems both in terms of our perspectives, as well as ering the valid concerns of the other party The key to developing and maintaining strong stakeholder relation-ships lies in recognizing that different parties can have very different but equally legitimate perspectives on

consid-a problem When we define problems, not just from our viewpoint but consid-also trying to understconsid-and how this sconsid-ame issue may to perceived by our stakeholders, we start operating in a "win-win" mode Further, we must be as precise as possible, staying focused on the specifics of the problem, not generalities The more accurately and honestly we can define the problem, the better able we will be to create meaningful solution options

DEVELOP SOLUTIONS There are two important points to note about this step First, developing solutions means precisely that: creating an action-plan to address, as much as possible, the needs of the various stake-holder groups in relation to the other stakeholder groups This step constitutes the stage in which the project manager, together with the team, seeks to manage the political process What will work in dealing with top management? In implementing that strategy, what reaction am I likely to elicit from the accountant? The client? The project team? Asking these questions helps the project manager develop solutions that acknowl-edge the interrelationships of each of the relevant stakeholder groups The discussion of power, political behavior, influence, and negotiation will be discussed in greater detail in Chapter 6

As a second point, it is necessary that we do our political homework prior to developing solutions 16 Note the late stage at which this step is introduced Project managers can fall into a trap if they attempt to manage a process with only fragmentary or inadequate information The philosophy of "ready, fire, aim" is sometimes common with stakeholder management The result is a stage of perpetual firefighting during which the project manager is a virtual pendulum, swinging from crisis to crisis Pendulums and these project managers share one characteristic: They never reach a goal The process of putting out one fire always seems to create a new blaze

TEST AND REFINE THE SOLUTIONS Implementing the solutions implies acknowledging that the project manager and team are operating under imperfect information You may assume that stakeholders will react to certain initiatives in predictable ways Of course, such assumptions can be erroneous In testing and refining solutions, the project manager and team should realize that solution implementation is an iterative process You make your best guesses, test for stakeholder reactions, and reshape your strategies accordingly Along the way, many of your preconceived notions about the needs and biases of various stakeholder groups must

be refined as well In some cases, you made accurate assessments At other times, your suppositions may have been dangerously naive or disingenuous Nevertheless, this final step in the stakeholder management process forces the project manager to perform a critical self-assessment It requires the flexibility to make accurate diagnoses and appropriate midcourse corrections

When done well, these six steps form an important method for acknowledging the role that stakeholders play in successful project implementation They allow project managers to approach "political stakeholder management" much as they would any other form of problem solving, recognizing it as a multivariate problem

as various stakeholders interact with the project and with one another Solutions to political stakeholder management can then be richer, more comprehensive, and more accurate

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FIGURE 2.4 Project Stakeholder Management Cycle

Source: D I Cleland 1998 "Project Stakeholder Management," in D I Cleland

and W R King (Eds.), Project Management Handbook, Second Edition,

pp 275-301 New York: Van Nostrand in Reinhold Reprinted with in permission

of John Wiley & Sons, Inc

An alternative, simplified stakeholder management process consists of planning, organizing, directing, motivating, and controlling the resources necessary to deal with the various internal and external stakeholder groups Figure 2.4 shows a model as suggested by Cleland 17 that illustrates the management process within the framework of stakeholder analysis and management Cleland notes that the various stakeholder management functions are interlocked and repetitive; that is, this cycle is recurring As you identify and adapt to stakeholder threats, you develop plans to better manage the challenges they pose In the process of developing and imple- menting these plans, you are likely to uncover new stakeholders whose demands must also be considered Further, as the environment changes or as the project enters a new stage of its life cycle, you may be required to cycle through the stakeholder management model again to verify that your old management strategies are still effective If, on the other hand, you deem that new circumstances make it necessary to alter those strategies, you must work through this stakeholder management model anew to update the relevant information

2 Organizational structure identifies the grouping together of individuals into departments and departments into the total organization How are individuals collected into larger groups? Starting

2.4 Forms of Organizational Structure 63

with the smallest, units of a structure continually recombine with other units to create larger groups, or organizations of individuals These groups, referred to as departments, may be grouped along a variety

of different logical patterns For example, among the most common reasons for creating departments

are: (I) function—grouping people performing similar activities into similar departments, (2) product—

grouping people working on similar product lines into departments, (3) geography—grouping people

within similar geographical regions or physical locations into departments, and (4) project—grouping people involved in the same project into a department We will discuss some of these more common departmental arrangements in detail later in this chapter

supporting mechanisms the firm relies on to reinforce and promote its structure These supporting mechanisms may be simple or complex In some firms, a method for ensuring effective communication is simply to mandate, through rules and procedures, the manner in which project team members must communicate with one another and the types of information they must routinely share Other companies use more sophisticated or complex methods for promoting coordination, such as the creation of special project offices apart from the rest of the company where project team members work for the duration of the project The key thrust behind this third element in organizational structure implies that simply creating a logical ordering or hierarchy of personnel for an organization is not sufficient unless it is also supported by systems that ensure clear communication and coordination across the departments

It is also important to note that within the project management context two distinct structures operate simultaneously, and both affect the manner in which the project is accomplished The first is the overall structure of the organization that is developing the project This structure consists of the arrangement of all units or interest groups participating in the development of the project; it includes the project team, the client, top management, functional departments, and other relevant stakeholders The second structure at work is the internal structure of the project team; it specifies the relationship between members of the project team, their roles and responsibilities, and their interaction with the project manager The majority of this chapter examines the larger structure of the overall organization and how it pertains to project management The implications of internal project team structure will be discussed here but explored more thoroughly in Chapter 6

2.4 FORMS OF ORGANIZATIONAL STRUCTURE

Organizations can be structured in an infinite variety of ways, ranging from highly complex to extremely simple What is important to understand is that typically, the structure of an organization does not happen by chance; it

is the result of a reasoned response to forces acting on the firm A number of factors routinely affect the reasons why a company is structured the way it is Operating environment is among the most important determinants or factors influencing an organization's structure An organization's external environment consists of all forces or groups outside the organization that have the potential to affect the organization Some elements in a company's external environment that can play a significant role in a firm's activities are competitors, customers in the marketplace, the government and other legal or regulatory bodies, general economic conditions, pools of avail-able human or financial resources, suppliers, technological trends, and so forth In turn, these organizational structures, often created for very sound reasons in relation to the external environment, have a strong impact on the manner in which projects are best managed within the organization As we will see, each organization type offers its own benefits and drawbacks as a context for creating projects

Some common structural types classify the majority of firms These structure types include the following:

1 Functional organizations—Companies are structured by grouping people performing similar activities

into departments

2 Project organizations—Companies are structured by grouping people into project teams on temporary

assignments

3 Matrix organizations—Companies are structured by creating a dual hierarchy in which functions and

projects have equal prominence

Functional Organizations

The functional structure is probably the most common organizational type used in business today The logic

of the functional structure is to group people and departments performing similar activities into units In the

P

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- Logistics

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I itiort warehousing Manulactt tring

Accounting

- Services

-

- Investments Employee Benelits

Vice President ol Research _ New Product

Vice President 01 Finance

Board of Directors

Chid Executive

Board of Directors

IL'ectitive

Vice President ol Vice President of Vice President of Vice President of

1- Market Research

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- Distribtition NVorel must! t

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Accounting Services Contracting

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New Product Development

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- Research Labs

- Quality

FIGURE 2.5 Example of a Functional Organizational Structure

functional structure, it is common to create departments such as accounting, marketing, or research and development Division of labor in the functional structure is not based on the type of product or project supported, but rather according to the type of work performed In an organization having a functional structure, members routinely work on multiple projects or support multiple product lines simultaneously Figure 2.5 shows an example of a functional structure Among the clear strengths of the functional organization is efficiency; when every accountant is a member of the accounting department, it is possible to more efficiently allocate the group's services throughout the organization, account for each accountant's work assignments, and ensure that there is no duplication of effort or unused resources Another advantage is that it

is easier to maintain valuable intellectual capital when all expertise is consolidated under one functional department When you need an expert on offshore tax implications for global outsourced projects, you do not have to conduct a firm-wide search but can go right to the accounting department to find a resident expert The most common weakness in a functional structure from a project management perspective relates

to the tendency for employees organized this way to become fixated on their concerns and work assignments

to the exclusion of the needs of other departments This idea has been labeled functional siloing, named for

the silos found on farms (see Figure 2.6) Siloing occurs when similar people in a work group are unwilling or

FIGURE 2.6 The Siloing Effect Found in Functional Structures

2.4 Forms of Organizational Structure 65

unable to consider alternative viewpoints, collaborate with other groups, or work in cross-functional ways For example, within Data General Corporation, prior to its acquisition by EMC, squabbles between engineer-ing and sales were constant The sales department complained that its input to new product development was minimized as the engineering department routinely took the lead on innovation without meaningful consul-tation with other departments Another weakness of functional structure is a generally poor responsiveness to external opportunities and threats Communication channels tend to run up and down the hierarchy, rather than across functional boundaries This vertical hierarchy can overload, and decision making takes time Functional structures also may not be very innovative due to the problems inherent in the design With siloed functional groups typically having a restricted view of the overall organization and its goals, it is difficult to achieve the cross-functional coordination necessary to innovate or respond quickly to market opportunities For project management, an additional weakness of the functional structure is that it provides no logi-cal location for a central project management function Top management may assign a project and delegate various components of that project to specialists within the different functional groups Overall coordination

of the project, including combining the efforts of the different functions assigned to perform project tasks, must then occur at a higher, top management level A serious drawback for running projects in this operating

environment is that they often must be layered, or applied on top of the ongoing duties of members of

func-tional groups The practical effect is that individuals whose main duties remain within their funcfunc-tional group are assigned to staff projects; when employees owe their primary allegiance to their own department, their frame of reference can remain functional Projects can be temporary distractions in this sense, taking time away from "real work." This can explain some of the behavioral problems that occur in running projects, such

as low team member motivation or the need for extended negotiations between project managers and ment supervisors for personnel to staff project teams

depart-Another project-related problem of the functional organization is the fact that it is easy to suboptimize the project's development 19 When the project is developed as the brainchild of one department, that group's efforts may be well considered and effective In contrast, departments not as directly tied to or interested in the project may perform their duties to the minimum possible level A successful project-based product or service requires the fully coordinated efforts of all functional groups participating in and contributing to the project's development

Another problem is that customers are not the primary focus of everyone within the functionally tured organization The customer in this environment might be seen as someone else's problem, particularly among personnel whose duties tend to be supportive Customer requirements must be met, and projects must be created with a customer in mind Any departmental representatives on the project team who have not adopted a "customer-focused" mind-set add to the possibility of the project coming up short

struc-Summing up the functional structure (see Table 2.2), as it relates to the external environment, the tional organization structure is well suited to firms with relatively low levels of external uncertainty because their stable environments do not require rapid adaptation or responsiveness When the environment is relatively predictable, the functional structure works well, because it emphasizes efficiency Unfortunately, project management activities within the functionally organized firm can often be problematic when they are

func-TABLE 2.2 Strengths and Weaknesses of Functional Structures

Strengths for Project Management Weaknesses for Project Management

1 Projects are developed within the basic

functional structure of the organization,

requiring no disruption or change to the

firm's design

2 Enables the development of in-depth

knowledge and intellectual capital

3 Allows for standard career paths Project

team members only perform their duties

as needed while maintaining maximum

connection with their functional group

1 Functional siloing makes it difficult to achieve cross-functional cooperation

2 Lack of customer focus

3 Projects generally take longer to complete due to structural problems, slower communication, lack

of direct ownership of the project, and competing priorities among the functional departments

4 Projects may be suboptimized due to varying interest or commitment across functional boundaries

Chief Executive 1

Vice President of Projects

Vice President of [Vice President ot Marketing 1 Production

Vice President 01 Finance

1

Vice I'residet u of Research

Project Beta

Board of Directors

applied in settings for which this structure's strengths are not well suited As the above discussion indicates, although there are some ways in which the functional structure can be advantageous to managing projects, in the main, it is perhaps the poorest when it comes to getting the maximum performance out of project manage-ment assignments 2°

Project Organizations Project organizations are those that are set up with their exclusive focus aimed at running projects

Construction companies, large manufacturers such as Boeing or Airbus, pharmaceutical firms, and many software consulting and research and development organizations are all firms that are organized as pure project organizations Within the project organization, each project is a self-contained business unit within the organization with a dedicated project team The firm assigns resources from functional pools directly to the project for the time period they are needed In the project organization, the project manager has sole control over the resources the unit uses The functional departments' chief role is to coordinate with project managers and ensure that there are sufficient resources available for them as they need them

Figure 2.7 illustrates a simple form of the pure project structure Projects Alpha and Beta have been

formed and are staffed by project team members from the company's functional groups The project manager

is the leader of the project and the staff all report to her The staffing decisions and duration of employees' tenure with the project are left up to the discretion of the project manager, who is the chief point of authority for the project As the figure suggests, there are several advantages to the use of a pure project structure

• First, the project manager does not occupy a subordinate role in this structure All major decisions and authority remain under the control of the project manager

• Second, the functional structure and its potential for siloing or communication problems are bypassed

As a result, communication improves across the organization and within the project team Because authority remains with the project manager and the project team, decision making is speeded up Project decisions can occur quickly, without lengthy delays as functional groups are consulted or allowed to veto project team decisions

• Third, this organization type promotes the expertise of a professional cadre of project management professionals Because the focus for operations within the organization is project based, everyone within the organization understands and operates with the same focus, ensuring that the organization main-tains highly competent project management resources

• Finally, the pure project structure encourages flexibility and rapid response to environmental ties Projects are created, managed, and disbanded routinely; therefore, the ability to create new project teams as needed is common and quickly undertaken

opportuni-FIGURE 2.7 Example of a Project Organizational Structure

2.4 Forms of Organizational Structure 67

Strengths for Project Management Weaknesses for Project Management

1 Assigns authority solely to the project manager

2 Leads to improved communication across the

organization and among functional groups

3 Promotes effective and speedy decision making

4 Promotes the creation of cadres of project

3 Difficult to maintain a pooled supply of intellectual capital

4 Concern among project team members about their future once the project ends

Although there are a number of advantages in creating dedicated project teams using a project structure (see Table 2.3), this design does have some disadvantages that should be considered

• First, the process of setting up and maintaining a number of self-contained project teams can be expensive Rather than the different functional groups controlling their resources, they must provide them on a full-time basis to the different projects being undertaken at any point This can result in forcing the project organization to hire more project specialists (e.g., engineers) than they might need otherwise, with a resulting loss of economies of scale

• Second, the potential for inefficient use of resources is a key disadvantage of the pure project zation Organization staffing may fluctuate up and down as the number of projects in the firm increases or decreases Hence, it is possible to move from a state in which many projects are running and organizational resources are fully employed to one in which only a few projects are in the pipeline, with many resources underutilized In short, manpower requirements across the organization can increase or decrease rapidly, making staffing problems severe

organi-• Third, it is difficult to maintain a supply of technical or intellectual capital: one of the advantages of the functional structure Because resources do not typically reside within the functional structure for long, it is common for them to shift from project to project, preventing the development of a pooled knowledge base For example, it is common for many project organizations to hire technically proficient contract employees for various project tasks They may perform their work and, when finished, their contract is terminated and they leave the organization, taking their expertise with them Expertise resides not within the organization, but differentially within the functional members who are assigned to the projects Hence, some team members may be highly knowledgeable while others are not sufficiently trained and capable

• A fourth problem with the pure project form has to do with the legitimate concerns of project team members as they anticipate the completion of the project What, they wonder, will be in their future once their project is completed? As noted above, staffing can be inconsistent, and there are often cases where project team members finish a project only to discover that they are not needed for new assignments Functional specialists in project organizations do not have the kind of permanent "home" that they would have in a functional organization, so their concerns are justified In a similar manner, it is common in pure project organizations for project team members to identify with the project as their sole source of loyalty Their emphasis is project based and their interests reside not with the larger organ-ization, but within their own project When a project is completed, they may begin searching for new challenges, even leaving the company for appealing new assignments

Matrix Organizations

One of the more innovative organization designs to emerge in the past 30 years has been the matrix structure The matrix organization, which is a combination of functional and project activities, seeks a balance between the functional organization and the pure project form The way it achieves this balance is to emphasize both function and project focuses at the same time In practical terms, the matrix structure creates a dual hierarchy in which there is a balance of authority between the project emphasis and the firm's functional departmentalization Figure 2.8 illustrates how a matrix organization is set up; note that the vice president for projects occupies a

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FIGURE 2.8 Example of a Matrix Organizational Structure

unique reporting relationship in that the position is not formally part of the organization's functional department structure The vice president is the head of the projects division and occupies one side of the dual hierarchy, a position shared with the CEO and heads of functional departments

Figure 2.8 also provides a look at how the firm staffs project teams The vice president of projects controls the activities of the project managers under his authority They, however, must work closely with functional departments to staff their project teams through loans of personnel from each functional group Whereas in functional organizations project team personnel are still almost exclusively under the control of the functional departments and to some degree serve at the pleasure of their functional boss, in the matrix organizational structure these personnel are shared by both their departments and the project to which they are assigned They remain under the authority of both the project manager and their functional department supervisor Notice, for example, that the project manager for Project Alpha has negotiated the use of two resources (personnel) from the vice president of marketing, 1.5 resources from production, and so forth Each project and project manager

is responsible for working with the functional heads to determine the optimal staffing needs, how many people are required to perform necessary project activities, and when they will be available Questions such as "What tasks must be accomplished on this project?" are best answered by the project manager However, other equally important questions, such as "Who will perform the tasks?" and "How long should the tasks take?" are matters that must be jointly negotiated between the project manager and the functional department head

It is useful to distinguish between two common forms of the matrix structure: the weak matrix times called the functional matrix) and the strong matrix (sometimes referred to as a (project matrix) In a weak matrix, functional departments maintain control over their resources and are responsible for managing their components of the project The project manager's role is to coordinate the activities of the functional departments, but to do so typically as an administrator She is expected to prepare schedules, update project status, and serve as the link between the departments with their different project deliverables, but she does not have direct authority to control resources or make significant decisions on her own In a strong matrix, the balance of power has shifted in favor of the project manager She now controls most of the project activities and functions, including the assignment and control of project resources, and has key decision-making authority Although functional managers have some input into the assignment of personnel from their departments, their role is mostly consultative The strong matrix is probably the closest to a "project organization" mentality that we can get while working within a matrix environment

(some-Creating an organizational structure with two bosses may seem awkward, but there are some important advantages to this approach, provided certain conditions are met Matrix structures are useful under circum- stances in which: 21

organization has scarce human resources and a number of project opportunities, it faces the challenge

2.4 Forms of Organizational Structure 69

of using its people and material resources as efficiently as possible to support the maximum number of projects A matrix structure provides an environment in which the company can emphasize efficient use of resources for the maximum number of projects

2 There is a need to emphasize two or more different types of output For example, the firm may need

to promote its technical competence (using a functional structure) while continually creating a series

of new products (requiring a project structure) With this dual pressure for performance, there is a natural balance in a matrix organization between the functional emphasis on technical competence and efficiency and the project focus on rapid new product development

3 The environment of the organization is complex and dynamic When firms face the twin challenges

of complexity and rapidly shifting environmental pressures, the matrix structure promotes the exchange of information and coordination across functional boundaries

In the matrix structure, the goal is to create a simultaneous focus on both the need to be quickly responsive to external opportunities and internal operating efficiencies In order to achieve this dual focus, equal authority must reside within both the projects and functional groups One advantage of the matrix structure for managing projects is that it places project management parallel to functional departments in authority This advantage highlights the enhanced status of the project manager in this structure, who is expected to hold a similar level of power and control over resources as depart- ment managers Another advantage is that the matrix is specifically tailored to encourage the close coordination between departments, with an emphasis on producing projects quickly and efficiently while sharing resources among projects as they are needed Unlike the functional structure, in which projects are, in effect, layered over a structure that is not necessarily supportive of their processes, the matrix structure balances the twin demands of external responsiveness and internal efficiency, creating

an environment in which projects can be performed expeditiously Finally, because resources are shared and "movable" among multiple projects, there is a greater likelihood that expertise will not be hoarded

or centered on some limited set of personnel, as in the project organization, but diffused more widely across the firm

Among the disadvantages of the matrix structure's dual hierarchy is the potentially negative effect that creating multiple authority points has on operations When two parts of the organization share authority, the workers caught in between can experience great frustration when they receive mixed or conflicting messages from the head of the project group and the heads of functional departments Suppose that the vice president for projects signaled the need for workers to concentrate their efforts on a critical project with a May 1 deadline If,

at the same time, the head of finance were to tell his staff that with tax season imminent, it was necessary for his employees to ignore projects for the time being to finish tax-related work, what might happen? From the team member's perspective, this dual hierarchy can be very frustrating Workers daily experience a sense of being pulled in multiple directions as they receive conflicting instructions from their bosses—both on projects and in their departments Consequently, ordinary work often becomes a balancing act based on competing demands for their time

Another disadvantage is the amount of time and energy required by project managers in meetings, negotiations, and other coordinative functions to get decisions made across multiple groups, often with different agendas Table 2.4 summarizes the strengths and weaknesses of the matrix structure

Matrix structures, as great a solution they may seem for project management, require that a great deal

of time be spent coordinating the use of human resources Many project managers comment that as part of

TABLE 2.4 Strengths and Weaknesses of Matrix Structures

Strengths for Project Management Weaknesses for Project Management

1 Suited to dynamic environments

2 Emphasizes the dual importance of project

management and functional efficiency

3 Promotes coordination across functional units

4 Maximizes scarce resources between competing

project and functional responsibilities

1 Dual hierarchies mean two bosses

2 Requires significant time to be spent negotiating the sharing of critical resources between projects and departments

3 Can be frustrating for workers caught between competing project and functional demands

the matrix, they devote a large proportion of their time to meetings, to resolving or negotiating resource commitments, and to finding ways to share power with department heads The matrix structure offers some important benefits and drawbacks from the perspective of managing projects It places project management

on an equal status footing with functional efficiency and promotes cross-functional coordination At the same time, however, the dual hierarchy results in some significant behavioral challenges as authority and control within the organization are constantly in a state of flux 22 A common complaint from project managers operating in matrix organizations is that an enormous amount of their time is taken up with

"playing politics" and bargaining sessions with functional managers to get the resources and help they need

In a matrix, negotiation skills, political savvy, and networking become vital tools for project managers who want to be successful

Moving to Heavyweight Project Organizations

The term heavyweight project organization refers to the belief that organizations can sometimes gain tremendous benefit from creating a fully dedicated project organization 23 The heavyweight project organization concept is based on the notion that successful project organizations do not happen by chance or luck Measured steps in design and operating philosophy are needed to get to the top and remain there Taking their formulation from the "Skunkworks" model, named after the famous Lockheed Corporation programs, autonomous project teams represent the final acknowledgement by the firm of the priority of project-based work in the company In these organizations, the project manager is given full authority, status, and responsibility to ensure project success Functional departments are either fully subordinated to the projects or the project teams are accorded an independent resource base with which

to accomplish their tasks

In order to achieve the flexibility and responsiveness that the heavyweight organization can offer, it

is important to remember some key points First, no one goes directly to the autonomous team stage when it comes to running projects This project organizational form represents the last transi-tional stage in a systematically planned shift in corporate thinking Instead, managers gradually move

to this step through making conscious decisions about how they are going to improve the way they run projects

Successful project firms work to expand the authority of the project manager, often in the face of stiff resistance from functional department heads who like the power balance the way it currently exists Giving project managers high status, authority to conduct performance evaluations of team members, authority over project resources, and direct links to the customers are part of the process of redirecting this power balance Project managers who are constantly forced to rely on the good graces of functional managers for their team staffing, coordination, and financial and other resources already operate with one hand tied behind their backs Heavyweight project organizations have realigned their priorities away from functional maintenance to market opportunism That realignment only occurs when the resources needed to respond rapidly to market opportunities rest with the project team rather than being controlled by higher level bureaucracies within a company Finally, as we note throughout this book, the shift in focus for many firms toward project-based work has begun to profoundly affect the manner in which the project organization, manager, and the team operate The new focus on the external customer becomes the driving force for operations, not simply one of several competing demands placed on the project team for them to satisfy as best they can

Ultimately, the decision of which organizational structure is appropriate to use may simply come down to one of expediency; while it may, in fact, be desirable to conduct projects within a structure that offers maximum flexibility and authority to the project manager (the pure project structure), the fact remains that for many project managers it will be impossible to significantly influence decisions to alter the overall organizational structure in support of their project As a result, perhaps a more appropriate question to ask is: What issues should I be aware of, given the structure of the organization within which

I will be managing projects? The previous discussion in this chapter has developed this focus as our primary concern Given the nature of the structure within which we must operate and manage our projects, what are the strengths and weaknesses of that form as it pertains to our ability to do our job as best we can? In formulating a thoughtful answer to this question, we are perhaps best positioned to understand and adapt most effectively to finding the link between our organization's structure and project management success